A comparison of statistics produced by the Cayman Islands Real Estate Brokers Association (CIREBA) for 2018 versus 2017 makes for interesting reading and underscores what we in the industry already knew simply from the incredibly busy year we have just had: Prices for Cayman real estate have moved up considerably in the past 12 months.
When reviewing the sold listings from Jan. 1 to Dec. 31, 2018, versus the same period in 2017, the figure that immediately stands out for me is the Total Sold price of all real estate for the year. At the end of 2017 that figure was US$463.37 million, jumping dramatically to $567.52 million, a huge leap of 22.5 percent year on year. The total number of properties that were sold in 2017 was 703, which makes the average price of each sale US$659,127.48. In 2018 the total number of sales was 806, up 14.65 per cent, which equates to the average price of each sale as US$704,119.78, clear evidence that property prices are on the rise.
These figures, which indicate an increase in the volume of activity as well as an increase in prices, do not surprise me in the slightest; it has been an incredibly active year and we have seen price increases in many sectors. It is, however, interesting to drill down on the figures to see where the greatest swings have taken place over the past year.
Residential sales growing
On the residential side, there were 492 transactions which took place in 2017 to a value totaling $369.45 million. That equals to an average of US$750,906 per residential transaction. Compare that with the total number from 2018 at 536, a rise of 9 percent, at a total value of $445.93 million, an average of $831,959 per transaction. Within the residential sector, I note that the greatest movement appears to be within the condominium market. In 2017 there were 327 condominium sales to a total value of $212.58 or $650,085 on average per sale. In 2018 there were 339 condo sales, a rise of 4 percent, at a total of $273.49 million or $806,762.42 per sale, on average. While this figure obviously includes condos at the lowest end of the market all the way up to multi-million dollar condos, it is still clear in my mind that condos have seen a huge leap in average value over the past 12 months, at a rate of just over 24 percent.
Another interesting fact that has been revealed when comparing statistics year on year is the reduction in value of multi-unit properties that have sold in 2018 versus 2017. In 2017 there were seven such sales that took place, to a total value of US$9,137,802.29; while in 2018 the total number of sales was up, at 10, but the total value was down, at US$6,637,185.56.
I believe that this is due to the fact that the inventory that came on the market has now been absorbed and the rental market has strengthened to such an extent (with few rentals now available) that owners are holding on to their investments and so only the less desirable properties are being sold right now.
Commercial transactions have seen something of a boom in 2018 when compared to 2017, with 12 such transactions taking place in 2017; however, while the volume has gone up, the value of the transactions has not increased proportionally. The total figure of transactions increased to 19 in 2018. In 2017 the total value of commercial property sales was $17.1 million, on average US$1,425,746 per sale. In 2018 the total value was $20 million, on average US$1.05 million. I believe that this is also as a result of older, less desirable class B or C properties being in the main the most frequently sold commercial properties.
Land sales up
Land sales, on the other hand, have shown a healthy leap in both volume and value. In 2017 there were a total of 192 land sales that took place to a total value of $67.67 million, or on average $352,470 per transaction, in comparison to 241 land sales in 2018 to a total value of $94.92 million on average of $393,863 per land sale. Among these land sales figures, perhaps the most surprising figures are those attributed to low density residential land sales (i.e. the type of land sales for normal house lots). In 2017 there were 134 sales of such land parcels, to the value of US$47.91 million, on average of $357,544. This figure leaps to 176 sales in 2018, but the value was lower on average – to a total value of US$49,82 million or on average of US$283,050 per land sale. The same cannot be said for beach resort residential land sales, which can include land for private use as well as for resorts, and which can be beach or ironshore-facing. In 2017 there were six such transactions to a value of $4.32 million, on average $719,314. Compare this to 2018’s figures of nine transactions to a value of $11.59 million, which equates to $1.29 million, on average.
Agricultural land has also seen an interesting increase, year on year in value rather than volume. In 2017 there were 18 transactions, in 2018 there were 16, but the total value of sales increased from $2.25 million in 2017 (an average of $125,122 per transaction) to $5.75 million (an average of $359,139 per transaction). I would possibly attribute this to people buying larger tracts of land further out in the eastern districts, possibly with a view to development there in the future.
When taking an overall view of the market shift, I believe that 2018 has been a stellar year for sales.